By Peter Nurse
Investing.com — The dollar declined at the beginning of the european session on Tuesday, while the federal Reserve’s decision to start buying bonds of companies in the u.s. boosted the sentiment at the expense of safe-haven securities.
Has 10: 10, the dollar index, which tracks the greenback against a basket of six other currencies, fell by 0.2% 96,498. The EUR/USD gained 0.2% to 1,1340, while the AUD/USD, risk-sensitive, increased 0.1 % to 0,6924.
Later in the day Monday, the u.s. central bank came to the rescue once more, by stating that it would begin to buy bonds of american companies of first quality to guarantee the companies ‘ access to liquidity and to ensure the liquidity of the credit market.
“The Fed has put in place additional stimulus measures on Monday, after market sentiment had deteriorated in the past week”, said the analysts of ING (AS:INGA) in a note to clients. “The loan program of the Fed and its program of bond-buying should help support risk sentiment, with Jerome Powell, who will travel to the Senate to testify later on Tuesday”.
The attention quickly turned to the testimony virtual the Fed chairman Jerome Powell, in front of the joint economic commission on economic outlook and recent monetary policy decisions, at 16: 00.
“Powell will testify before Congress later in the day, and will repeat probably the message is dovish on the economy issued after the FOMC meeting last week,” said the chief economist Timothy Fox NBD Emirates, in a note to clients.
The USD/JPY has risen 0.1 % to 107,47 after the Bank of Japan has maintained parameters stable currency earlier on Tuesday, but has increased the size of its packages of loans to businesses short of cash to 1 000 billion dollars, compared to about 700 billion announced last month.
The pound sterling gained on Tuesday, in a context of sounds optimistic from London and Brussels after the discussion of Brexit between the Prime minister and Boris Johnson, and the president of the european Commission Ursula von der Leyen.
However, the latest data on employment in the United Kingdom are a mixed bag : the unemployment rate remained unexpectedly to 3.9 % in the three months to April, while many expected a rise in the unemployment rate to 4.7 %. However, the number of job seekers in may rose by almost 530 000, and the increased demand for April has been revised upward, from $ 857, 000 to over a million
The GBP/USD rose 0.3% to 1,2641 and the EUR/GBP is down 0.1% to 0,8972.